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Notes to Accounts of Kokuyo Camlin Ltd.

Mar 31, 2015

(i) Terms/rights attached to equity shares

The Company has only one class of equity shares with a par value of '' 1/- per share. Each holder of equity share is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to number of equity shares held by the shareholders.

2. Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs. 332.88 lacs (Rs. 232.26 lacs).

2. Other money for which the Company is contingently liable Rs. 14.39 lacs (Rs. 14.39 lacs).

3. Bank Guarantees as at 31st March, 2015 Rs. 76.03 lacs (Previous year Rs. 41.50 lacs).

ii. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 3,240.33 lacs (Rs. 579.05 lacs).

3. Excise Remission at Jammu:

The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of Rs. 306.20 lacs (Rs. 288.86 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31,2015, so recognised is Rs. 1785.31 lacs (Rs. 1,479.11 lacs).

A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11,2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency.

4. Utilisation of proceeds of Rights issue:

On September 2, 2013, the Company pursuant to its rights issue of equity shares allotted 31,283,831 Equity Shares of face value of Rs. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price of Rs. 33/- per share (inclusive of Share Premium of Rs. 32/- per share). The aggregate amount collected pursuant to the rights issue was Rs. 10,323.66 lacs.

5. Leases:

The Company has taken various office premises/godowns/residential flats (including furniture & fixtures) under leave and license agreements ranging under 12 months to 3 years on leave and license. These arrangements are renewable by mutual consent on mutually agreed terms. These lease payments are recognized in the statement of profit and loss under rent.

6. Retirement Benefits:

Defined Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Statement of Profit and Loss.

Defined Benefit Plan

Company''s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

All Employees at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Plan assets of the gratuity fund comprise entirely of amounts invested in a Group Gratuity Policy issued by LIC of India. The information on the allocation of gratuity fund into major asset classes and the expected return on each major class is not readily available. The management understands the assets in the fund are well diversified.

Leave encashment:

The accumulated balance of leave encashment (unfunded) provided in the books as at year end is Rs. 161.01 lacs (Previous year - Rs. 140.91 lacs) determined on actuarial basis using projected unit credit method.

7. Segment Reporting:

The Company is engaged in the business of dealing in "Consumer Products". Hence, separate segment reporting has not been made under Accounting Standard (AS) 17 -"Segment reporting" issued by the Institute of Chartered Accountants of India (IcAl). The Operations of the company comprise a single geographical segment, India.

8. Prior year comparatives

Previous year''s figures, shown separately as such or in brackets are recast/regrouped wherever necessary.


Mar 31, 2014

1. Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs. 232.26 lacs (Rs. 183.36 lacs).

2. Other money for which the Company is contingently liable Rs. 14.39 lacs (t 34.78 lacs).

ii. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 579.05 lacs (Rs. 530.41 lacs).

2. Excise Remission at Jammu:

a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of Rs. 288.86 lacs (Rs. 411.45 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31, 2014, so recognised is Rs. 1,479.11 lacs (Rs. 1,190.25 lacs).

b. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency.

3. Equity Shares:

On September 2, 2013, the Company pursuant to its right issue of equity shares allotted 312,83,831 Equity Shares of face value of Rs. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price of Rs. 33/- per share (inclusive of Share Premium of Rs. 32/- per share). The aggregate amount collected pursuant to the rights issue was Rs. 10,323.66 Lacs.

4. The disclosures in respect of Employees Stock Option Scheme which are outlined in this year''s Annexure to the report of Directors and report on Corporate Governance are treated as an annexure to these accounts.

5. In the Board meeting held on 20th March 2014, the Company decided to exit from its loss-making business of running preschools and as a result sell its entire holding in the Wholly Owned Subsidiary (''WOS''), Alpha kids Learning & Activity Centre Limited (formerly Camlin Alpha kids Ltd). The Board also took a decision to fully write off the amounts advanced to this subsidiary in the earlier years aggregating Rs. 305.32 lacs which is exceptional in nature.

The Investments made in this WOS, i.e. Equity Capital of Rs. 130 lacs & Preference Capital of Rs. 100 lacs have been sold to Mr. Dilip Dandekar & his associate Company/relatives for a purchase consideration of Rs. 50 lacs in April, 2014. This sale is subject to ratification by shareholders. As a consequence, the shortfall of Rs. 180 lacs has been fully provided for and is also included as an exceptional item.

iv. Retirement Benefits:

Defend Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Statement of Profit and Loss.

Defend Benefit Plan

Company''s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash fowl using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defend benefit obligation.

Retirement Benefits

Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defend benefit plan and the aforesaid insurance policy is the plan asset.


Mar 31, 2013

1. Contingent Liabilities and Commitments (to the extent not provided for) i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts: Rs. 183.36 Lacs (Rs. 317.97 Lacs).

2. Other money for which the Company is contingently liable: Rs. 34.78 Lacs (Rs. 23.42 Lacs).

ii. Commitments:

1. Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs. 530.41 Lacs (Rs. 291.95 Lacs)

2. Corporate guarantees given to the banker of a related party ColArt Camlin Canvas Pvt. Ltd.: Rs. Nil (Rs. 150 Lacs)

2. Excise Remission at Jammu:

a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification applicable to the undertakings set-up in Jammu. The notification restricted the quantum of excise duty remission and the Jammu and Kashmir High Court upheld the entitlement to total exemption from excise duty. The Company has obtained legal advice which confirms the company''s right to such total exemption and in terms of the judgment of the High Court, rebate of excise duty, being the duty on assessable value of goods, net of CENVAT credit of Rs. 411.45 Lacs (Rs. 335.17 Lacs), is recognised as revenue and accrued as income from operations. The cumulative amount of remission as on March 31,2013 so recognised isRs. 1190.25 Lacs (Rs. 778.80 Lacs).

b. A writ petition was filed by the company in the Jammu and Kashmir High Court praying for quashing of the notification. Pending final disposal of the petition filed by the company, the Jammu and Kashmir High Court had modified the earlier interim order, issued on May 4, 2011, in OWP 601/2011 on March 11,2013. Consequently, the Jammu and Kashmir High Court has directed the excise department to release 50% of the amount due to the manufacturers, subject to the approval of the Jurisdictional Commissioner of Excise to ensure liquidity and solvency of the manufacturers.

3. Equity Shares:

i. During the preceding year 2011-12, the company had allotted 69,34,000 equity shares ofRs. l/-each at a price of Rs. 85/- per share (inclusive of share premium of Rs. 84/- per share) aggregating to Rs. 5,893.90 Lacs on preferential basis to KOKUYO S&T Co., Ltd. on the terms and conditions approved by the members at the Extra Ordinary General Meeting held on June 29, 2011.

ii. The utilisation of funds received by way of preferential allotment is as under:

4. Managerial Remuneration

The Company has sought approval of the Central Government in relation to managerial remuneration paid to the Whole-time Directors/Managing Director/Manager. The approval is awaited.The details of the same are as under:

a. Remuneration to resident Whole-time Directors, including Managing Directors, aggregating to Rs. 32.24 Lacs as waiver of excess remuneration paid for the financial year 2011-12 in view of inadequacy of profits for the year.

b. Remuneration to resident Whole-time Directors, including Managing Directors, aggregating to Rs. 185.75 Lacs as minimum remuneration, in view of inadequacy of profits for the financial year 2012-13.

c. Appointment and payment of remuneration to Whole-time Directors/Manager with effect from February 01, 2013 for the period of three years as approved by the members byway of passing special resolution through postal ballot on March 28, 2013.

5. Micro, Small and Medium Enterprises Development Act, 2006:

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED Act) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relating to Micro and Small Enterprises as at March 31, 2013 are as under:

6. The disclosures in respect of Employees'' Stock Option Scheme which are outlined in this year''s Annexure to the Directors Report and the Report on Corporate Governance, are treated as an annexure to these accounts.

7. The Board of Directors, in its meeting held on August 7, 2012, had approved issue of equity shares on rights basis to its existing shareholders, for an issue size not exceeding Rs. 110 Crores.The Company has filed a draft letter of offer with the Securities Exchange Board of India (SEBI) on March 28, 2013 and is awaiting its observations on the same. Expenditure of Rs. 38.81 Lacs related to the said issue is carried in ''Other Advances'' under''Short-term Loans and Advances''.

8. Previous year''s figures, shown separately as such or in brackets are recast/regrouped wherever necessary.


Mar 31, 2012

Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs 317.97 Lacs (Rs 309.79 Lacs).

2. Other money for which the Company is contingently liable Rs 23.42 Lacs (Rs 26.73 Lacs).

ii. Commitments:

1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 291.95 Lacs (Rs 216.40 Lacs).

2. Corporate Guarantees given to the banker of a Related Party ColArt Camlin Canvas Pvt. Ltd. Rs 150.00 Lacs (Rs 150.00 Lacs).

1. Excise Remission at Jammu:

a. The Hon'ble Jammu and Kashmir High Court delivered a judgment dated December 23,2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantam of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company's right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty, being the duty on assessable value of goods, net of Cenvat Credit on inputs, of Rs 335.17 Lacs (Rs 443.63 Lacs), is recognized as revenue and accrued as income from the operations. The cumulative amount of remission as on March 31, 2012, so recognized is Rs 778.80 Lacs (Rs 443.63 Lacs).

b. A writ petition was also filed by the Company praying the quashing the impunged notification in its case. Pending the final disposal of the petition filed by the Company, the Hon'ble High Court has directed the authorities to refrain from giving effect to the said notification in its case.

2. Equity Shares:

a. During the year, the Company has allotted 69,34,000 Equity Shares of Rs 1/- each at a price of Rs 85/- per share (inclusive of Share Premium of Rs 84/- per share) aggregating to Rs 5,893.30 Lacs on Preferential basis to KOKUYO S&T Co., Ltd. on the terms and conditions approved by the Members at the Extra Ordinary General Meeting held on June 29th, 2011. The Company has also allotted 9,03,038 Equity Shares of Rs 1/- each at a price of Rs 16/- per share to its employees under "Camlin Employees Stock Option Scheme 2008"(ESOP 2008).Accordingly the paid up capital of the Company increased from Rs 610.65 Lacs to Rs 689.02 Lacs and share premium has increased from Rs 2139.68 Lacs to Rs 8,040.20 Lacs.

3. Managerial Remuneration:

Approvals of the Central Government under the applicable provision of the Companies Act are awaited in respect of the following:

a. Remuneration to resident whole-time Directors, including Managing Director, aggregating to Rs 202.63 Lacs, as minimum remuneration, in view of inadequacy of profits for the year.

b. Remuneration of Rs 83.04 Lacs to the non-resident Directors.

4. The disclosures in respect of Employees Stock Option Scheme which are outlined in this year's Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

iv. Retirement Benefits:

Defined Contribution Plans

Company's contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognized in the Profit and Loss Account.

Defined Benefit Plan

Company's liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognized on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

5. Previous year's figures, shown separately as such or in brackets, are recast/regrouped wherever necessary.


Mar 31, 2011

A. Contingent Liabilities

i. In respect of Guarantees issued on behalf of the Company by its Bankers to the extent of Rs. 16.00 Lacs (2009-2010- Rs.2.10 Lacs).

ii. Corporate Guarantees given to ColArt Camlin Canvas Pvt. Ltd. Rs.150.00 Lacs (2009-2010 Rs. 150.00 Lacs).

iii. Demands against the Company, either disputed or not acknowledged as debts and not provided for: (Rs. Lacs) 2010-11 2009-10 a. Income Tax 112.61 136.29

b. Sales Tax 126.98 69.54

c. Excise/Custom Duty 77.37 74.06

d. Service Tax 1.89 1.89

e. Labour Matters 10.05 8.13

f. Others 7.63 0.63

iv. Incremental wage demands in respect of Tarapur plant following the expiry of the earlier settlement- amount unascertainable.

C. Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 216.40 Lacs (2009-2010 Rs. 182.70 Lacs).

D. Secured Loans

Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified Immovable and Movable Fixed Assets of the Company ranking pari-passu by way of Second Charge.

Vehicle Loans are secured by hypothecation of related vehicles.

E. Investment in/advances to Associate Company

The Company holds shares in ColArt Camlin Canvas Pvt. Ltd. at a carrying cost of Rs. 52.20 Lacs and has given advance (including interest accrued thereon) of Rs. 54.47 Lacs to the said Company. The net worth of the said Company stands eroded by accumulated losses. The turnaround business plans

have failed to bear fruition. Therefore, provision is made for decline the value of investments as also for the apprehended non-realisability of the advance. Accordingly, as amount of Rs. 106.67 Lacs is provided in the Profit and Loss Account and shown as an exceptional item therein.

F. Loans And Advances

Staff Advances include Loans/Advances due from Officers Rs. Nil (2009-2010 - Rs. Nil) Maximum balance Rs. Nil (2009-2010 -Rs. Nil).

H. Managerial Remuneration

ii. In view of the inadequacy of profits, the managerial remuneration is in excess of the limits laid down in Section 309 of the Companies Act, 1956 by Rs. 56.82 lacs. A special resolution will be proposed in the ensuing Annual General Meeting seeking the shareholders sanction and approval of the Central Government, to consider the total remuneration paid as the minimum remuneration.

iv. Retirement benefits

Defined contribution Plans

Companys contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Profit and Loss Account.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named Employee Group Gratuity Assurance Scheme issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

v. The Honble Jammu and Kashmir High Court delivered a judgement dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantam of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice conforming the Companys right to such total exemption on the grounds laid down in the judgement of the High Court, incremental remission of excise duty of Rs. 221.76 lacs is recognised as revenue in this year including Rs. 84.61 Lacs relating to earlier years and accrued as income from the operations.

A writ petition was also filed by the Company praying the quashing of the impunged notification in its case. Pending the final disposal of the petition filed by the Company, the Honble High Court has directed the authorities to refrain from giving effect to the said notification in its case.

vi. Related Parties Disclosures: (as certified by the management): (a) Associate Companies/Subsidiary Companies:

Name of the Related Party Nature of Relationship

1. Camlin North America, Inc., USA Subsidiary

2. Camlin International Ltd. Subsidiary

3. Camlin Alphakids Ltd. Subsidiary

4. ColArt Camlin Canvas Pvt. Ltd, Associate

5. CAFCO Consultants Ltd. Associate

6. Camart Industries Ltd. Associate

7. Camellia Management Services Pvt. Ltd. Associate

8. Camellia Infotech Ltd. Associate

9. Camlidhan Investments Pvt. Ltd. Associate

10. Camlink Agencies LLP. Associate

11. Camlink Consultants Pvt. Ltd. Associate

12. Dandekar Developers Pvt. Ltd. Associate

13. Dandekar Investments & Consultants Pvt. Ltd, Associate

14. Dandekar Print Pack Pvt. Ltd. Associate

15. DDI Consultants Pvt. Ltd. Associate

16. Excella Pencils Ltd. Associate

17. Camlin Fine Chemicals Ltd. Associate

18. Nilmac Packaging Industries Ltd. Associate

19. Camlidhan Enterprises Pvt. Ltd. Associate

20. Triveni Pencils Ltd Associate

21. Mayur Colours Limited Associate

22. Vibha Agencies Pvt. Ltd. Associate

(b) Key Management Personnel and their Relatives:

Name of the person Nature of Relationship

Key Management Personnel

Mr. D. D. Dandekar Chairman & Managing Director (C.M.D)

Mr. R. M. Dandekar Joint Managing Director

Mr. S. S. Dandekar Executive Director

Mr. D.M. Dandekar Executive Director

Relatives

Mr. S.D. Dandekar Chairman Emeritus and brother of C.M.D

Mrs. A.D. Dighe General Manager (Marketing) and daughter of C.M.D.

Mr. R.D. Dandekar Officer (School Activity Team & Business Development") and son of C.M.D.

L. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

M. Previous years figures are recast/regrouped wherever necessary.

23. SUPPLEMENTARY INFORMATION FORMING AN INTEGRAL PART OF THE PROFIT & LOSS ACCOUNT

Additional information pursuant to the provisions of paragraphs 3,4C & 4D of part II of Schedule VI to the Companies Act, 1956. Details of installed capacity production and sales of the goods manufactured.

* As certified by the Management and relied upon by the Auditors, this being a technical matter.

* * * Installed capacity worked out on the basis of existing product mix.

> Includes captive consumption-120420 Ltrs, 56104 kgs. (2009-2010-61,230 Ltrs., 80,869 Kgs.and 80,640 nos.). ++ Class of Goods is based on main classification given in the Industries (Development and Regulation) Act, 1951.

NOTES:

1. Figures in brackets are for the previous year.

2. The quantities mentioned in nos./packs comprise of heterogeneous packings.

3. Quantities of sales include promotional distribution and are adjusted for damaged goods and physical verification differences.




Mar 31, 2010

A. Contingent Liabilities:

i. In respect of Guarantees issued on behalf of the Company by its Bankers to the extent of Rs. 2.10 Lacs (2008 - 2009 Rs. 1.60 Lacs).

ii. Corporate Guarantees given to ColArt Camlin Canvas Pvt. Ltd. Rs. 150.00 Lacs (2008-2009 Rs. 150.00 Lacs).

iii. Demands against the Company, either disputed or not acknowledged as debts and not provided for:

(Rs. in Lacs) a. Income Tax 136.29 151.53 b. Sales Tax 69.54 62.08 c. "Excise Duty 74.06 81.37 d. Service Tax 1.89 1.89 e. abourMatters 8.13 8.13 f. Others 0.63 0.63

C. Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 182.70 Lacs (2008-2009 Rs. 396.30 Lacs).

D. Secured Loans

Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari- passu between them as also mortgage/hypothecation of specified Immovable and Movable Fixed Assets of the Company ranking pari-passu by way of Second Charge.

Vehicle Loans are secured by hypothecation of related vehicles.

E. Investment in/advances to Associate Company

The Company holds shares in ColArt Camlin Canvas Pvt. Ltd. at a carrying cost of Rs. 52.20 Lacs and has given advance of Rs. 36.80 Lacs to the said Company. The net worth of the said Company stands eroded by accumulated losses. However, in view of the turn-around business plans implemented by the

Management of the said Company, no provision for impairment is considered necessary at this stage in respect of the investment. Likewise, the advances are expected to be realised fully and no provision is made there against.

F. Loans and Advances

Staff Advances include Loans/Advances due from Officers Rs. Nil (2008-2009 Rs. Nil) Maximum balance Rs. Nil (2008-2009 Rs. Nil).

G. The Investor Education and Protection Fund shall be credited by the following amounts as per prescribed time frame

iv. Retirement benefits:

Defined contribution Plans

Companys contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Profit and Loss Account.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named Employee Group Gratuity Assurance Scheme issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

Until last year, the accruing liability for gratuity was estimated on actuarial basis by restricting the amount of liability to the maximum limit of Rs. 3.50 Lacs payable under the Payment of Gratuity Act. However, the Management has decided to remove the ceiling forthwith on the amount of gratuity payable to the employees. Accordingly, the accruing liability has been estimated as at the Balance Sheet date without considering any ceiling on the amount of gratuity which has resulted in the provision of past service cost of Rs. 108.73 Lacs.

vi. Micro, Small and Medium Enterprises Development Act, 2006

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relatinq to Micro and Small Enterprises as at 31st March, 2010 are as under:

L. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

M. Previous years figures are recast/regrouped wherever necessary.

 
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